Economists Should Promote Self-Esteem Through Non-Consumptive Means

Cover Photo: M. H. Benton (2018), Bangkok MRT advertisement – a beauty clinic uses seductive imagery to promote their service through an appeal to self-esteem.
Volume 1, Number 2: October 2018 | Editorial

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While seemingly benign, advertising sends a message that all we need to do is buy the right product or pay for the right service and we will feel so much better about ourselves. This seems like a good thing. While it is true that most people after shopping feel some positive effects, and this can be beneficial if it is meaningful consumption, the negative effects are often subtle, difficult to perceive, and occur over long periods of time. A significant percentage of advertising is a game of manipulation, one in which, in order to sell products, the goal is to convince people to buy products that they neither wanted nor needed. This leads us to identify an important category of consumption which I will define as wasteful consumption. This is consumption simply for the sake of fulfilling [artificially] created wants. The profit making from the sales of this type of consumption serves as a form of extraction, in that the end result for the consumer is that they are no better off in terms of net gains in satisfaction, but they have sacrificed valuable time and money that could have been better spent elsewhere, and they are left wanting more and more in an endless cycle of unfulfillment. I argue that economists should promote mental health and general well-being through non-consumptive means, because that would be environmentally and socially sustainable and this, I would posit, is economic in its truest sense of the word.

To lay a foundation for this argument, it is important to identify key elements of the economic system. While capitalist systems have many key defining characteristics, the one that concerns us most for this discussion is the growth imperative. The growth imperative is critical in a capitalist system because of the social separation of ownership and work combined with the profit motive. The central aim of a capitalist system is to accumulate money for an investor class. In order for someone to earn income through capital ownership, not through labor, there must be capital gains – in other words, buying [low] on the input side and selling [high] on the output side.  This drive for accumulating returns to investors drives the growth in the production of goods and services. What happens when growth slows down or comes to a halt? The result is at a minimum a recessionary crisis or at worse a depression and widespread systemic failure. In order to serve the interests of investors and to prevent systemic crisis, there needs to be constant growth in production and, hence, consumption.

This brings us to the next key concepts which economists rarely discuss: economic versus uneconomic growth and meaningful versus wasteful consumption. Ecological economists make a distinction between growth and development, with growth being quantitative in terms of output and development being qualitative in terms of quality of life.

Standard neoclassical economics makes no distinction between economic versus uneconomic growth in output, assuming more is always better, and often uses growth as a proxy for quality of life. This is problematic for a number of reasons, primarily because it omits from consideration any of the possible costs associated with increased output. At low levels of output, growth in output can provide significant benefits on the margin, while the costs of initial increases in growth are quite limited. It is clearly economic to expand output. How is advertising related to economic growth and meaningful consumption? Beyond a certain point, once certain standards of living are met, growth must be promoted and the growth promoted by the advertising culture becomes uneconomic.

Meaningful consumption is what we normally think of when we use the term consumption. In this case, it may be assumed that more is better, but the additional enjoyment, even if it is meaningful, becomes less and less with ever more units consumed. Wasteful consumption, as mentioned earlier, is a broad label that includes two key types. The first is not related to advertising but is consumption which provides no noticeable benefit and could be reduced without any reduction in well-being, such as extra napkins, sauce packets, plastic straws and utensils, which go immediately into the trash upon receipt. The second is related to advertising and is consumption simply for the sake of fulfilling [artificially] created wants.

Advertising is directly connected to the second type of wasteful consumption and it operates through the channel of self-esteem. What is self-esteem? It is an individual’s overall subjective emotional evaluation of his or her own worth. As social animals humans look for some form of external validation and often their perceived self worth is attached to social inclusivity, but it can also be derived internally. I introduce two types of self-esteem: baseline and conditional. What determines the baseline level? Baseline self-esteem is derived from personal accomplishments, social support from peer groups, and from helping others through social contributions. Conditional self-esteem as I define it is based on interpersonal comparisons and is, for the most part, externally determined. When people attach less weight to the conditional aspect of their self-esteem, they will care less about consumption of luxury products which are purchased simply for displaying economic prosperity, known as conspicuous consumption. I argue that the demand for these products is driven by a need to substitute for a deficit in baseline self-esteem. This deficit can be generated through the advertising culture and is a clear profit opportunity for those who know how to take advantage of this. The growth imperative of the economic system encourages people to seek out these types of opportunities.

People argue that buying things makes them feel better about themselves. Is this true self-esteem building? Buying a sports car or expensive handbag? Cosmetics and cosmetic procedures? This is due to an entire culture of manipulation, which includes advertising, pop culture, and social norms.  Advertisement, specifically, preys on the externally determined self-esteem. The mechanisms used promote imagery to encourage spending on one’s self to either match the artificially constructed standard or to try to surpass others in a type of “keeping-up-with-the-Jones” type of competition. People can clearly get rich by lowering someone’s self-esteem, while in the end not even making that person any better off. While they may perceive the temporary boost in self-esteem from consuming the advertised product, the lowering of their self-esteem through the entire advertising culture is imperceivable.

Promoting less-consumptive means of achieving self-esteem is socially sustainable, because it eliminates wasteful competition and it eliminates the compulsion to earn more and more money by any means possible, including externalizing costs and exploitation. Therefore, I endorse non-consumptive means to increase baseline self-esteem, such as accomplishing personal challenges, socially supportive peer affiliation, and social contributions.

How is promoting self-esteem through non-consumptive means related to environmental sustainability? The problem with the standard circular flow model of production and exchange is that it omits the laws of thermodynamics, which state that, first, energy and matter can be neither created nor destroyed and, second, that energy flows in a single direction from low-entropy, useable forms, through the process of work, into high-entropy, unusable forms (ie. waste). In order to continue producing for material consumption, there needs to be a continuous flow of energy throughput. This means depleting useful forms of energy while creating waste. This is economic as long as these costs are considered and the value derived from the production and consumption process outweighs these. Finding ways to reduce material consumption, and even the provision of some services, is environmentally sustainable, because it requires less energy and material throughput and creates fewer by-products of our consumption in the form of non-recycled, post-consumer waste and less pollution which is generated in the production and distribution of consumables.

Finally, I would argue that promoting self-esteem through non-consumptive means is truly economic because we can achieve greater well-being than what we are achieving now with the same, if not fewer, resources. Lowering material consumption would only be counter-productive in the true economic sense if it makes people in net worse off. Fortunately, this is not necessarily the case. If people realize that consuming less actually can be welfare enhancing, then they will not feel as compelled to stay on the work-spend-work-spend treadmill and can enjoy more leisure time and time with friends and family. Spending time with people who value you for who you are, not because of what kind of material items you possess, and who reinforce your self-esteem can lead to significant welfare improvements. Advertising reinforces the social practice of judging people by physical appearance and material possessions, which is a negative consequence of the growth imperative of a capitalist economic system.

We can promote self-esteem by first drawing attention to social manipulation, possibly through education. Discouraging manipulative and socially harmful advertising would be another possible starting point  and then reinforcing positive social support through a variety of channels, such as publicly and privately funded social marketing campaigns. Economics education can also address this issue by reassessing the models it presents to either question the validity of the consumption and economic growth components of the models, or, at the very least, bring in more qualitative analysis. This is one example of where economics educators must decide whether continuing to teach economics in a way that reinforces the current [un]economic system or whether promoting more cost-effective ways of enhancing people’s lives, which is actually economic, is more important.